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Court Blocks Some Sales in Sunglass Suit

November 22, 2001|Bloomberg News

Luxottica Group said a California court issued a restraining order temporarily barring the company from selling some sunglasses in the U.S. after Oakley Inc. claimed the Italian company was selling knockoff designs.

The U.S. District Court for the Central District of California barred Luxottica from selling three sunglass models until Nov. 30. Foothill Ranch-based Oakley said in a suit that Luxottica bought its biggest customer, the Sunglass Hut chain, and began selling knockoffs of Oakley designs.

The 2,000-store Sunglass Hut chain accounted for as much as 25% of Oakley's annual sales until Milan-based Luxottica bought the chain in April. Sales of Oakley were $363.5 million last year.

Oakley's federal lawsuit filed this month says Luxottica, which also owns the Ray-Ban brand and LensCrafters stores, reneged on a pledge to keep "business as usual" between Sunglass Hut and Oakley. Sunglass Hut stopped ordering Oakley sunglasses and started selling knockoffs, the suit said.

Luxottica said it would "vigorously" fight the allegations. The three models represent less than 1% of total sales in the last four months, spokeswoman Alessandra Senici said. Luxottica's American depositary receipts fell 45 cents to $15.85 on the New York Stock Exchange. Shares of Oakley fell 37 cents to $13.32, also on the NYSE.

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